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A High-Pressure Pipeline is a type of pipeline that is used to transport crude oil, petroleum products and natural gas across countries or within states at very high pressure. In order to keep the liquids and gases flowing in the pipeline, the pressure of the pipeline has be to increased and constantly kept in the range of 200 to 1500 psi...
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The Challenges Of Shipping and Distributing Liquefied Natural Gas

Takeaway:This article discusses the processes and challenges in the extraction, shipping and distribution of LNG. LNG as it requires special carriers to transport and store it hence it is faced with several challenges in transportation. Shipping LNG in gaseous form is a big challenge.

LNG is a liquid form of natural gas. It is converted into liquid
form by cooling it below minus 163 degrees Celsius. As a result of the cooling
exercise it occupies 600 times lesser space as compared to gaseous state and
hence it facilitates easy transportation. LNG has a wide range of use spanning
across all sectors from power generation and industrial processes to commercial
and domestic applications for heating and cooking.

Once LNG
is liquefied, it is ready for transportation to end user points. However,
challenges lie in shipping and transportation of LNG as it requires special
carriers. Also, once it reaches the destination of consumption, additional
facilities such as re-gasification and associated pipeline infrastructure are
required as mainly it is used in gaseous form by the industries and domestic
users. The first LNG carrier was launched in the Calcasieu River on the
Louisiana Gulf coast in January 1959. The world’s first ocean cargo of LNG
sailed to the UK for delivery.

Before
we attempt to detail the challenges in shipping and distribution, let us
briefly see the LNG value chain.

LNG value chain

LNG
value chain consists of 4 key areas. Firstly, natural gas has to be extracted
from the earth. This process is called as Exploration and Production where gas
reserves are first detected after detailed seismic analysis and series of tests.
Before full-fledged drilling of natural gas, test wells are drilled and once
they are found viable, commercial drilling operations are undertaken.

Once the
gas is extracted, it is filtered and purified. On completion of the above
process, the gas is compressed to a liquid form so that it can be safely and
easily transported in bigger volumes. A liquefaction plant is put up to convert
the gas into liquid. This plant is also referred to as “liquefaction train” that
reduces the volume of gas by a factor of around 600 through a multistage
refrigeration process. In other words 1 cubic meter of LNG at -163°C has the
same energy content as 600 cubic meters of “gaseous” gas at ambient temperature
and atmospheric pressure. This is the second stage of the value chain.

Thirdly
after liquefaction, LNG is loaded onto specially designed ships built around
insulated cargo tanks to keep the LNG in liquid state throughout the voyage.
The gas is then shipped to centers of demand.

Lastly
the process of receiving and distribution begins at LNG gas terminals. The terminals
consist of storage tanks and re-gasification facilities where the liquid gas is
converted back into the gaseous state through a process of heating called
vaporization. After that, through pipelines and trucks they are transported to
end users. The last two processes are described in more detail in the ensuing
paragraphs.

Anatomy of LNG vessels

LNG
tankers are double-hulled ships specially designed and properly insulated to
prevent hull leaks and ruptures in the event of an accident. A typical LNG
carrier has four to six tanks located along the center-line of the vessel.
Surrounding the tanks is a combination of ballast, cofferdams and
voids giving the vessel a double-hull type design. These tanks can be broadly
classified into three types based on their design, i.e., membrane tanks, spherical
tanks and IHI prismatic tanks. Membrane tanks are built in the vessel and forms
as a part and hold on to the hull with series of insulations. The spherical and
prismatic tanks are kept separately from the hull and are self-supporting
structure.

The
spherical and membrane types are accepted worldwide as cryogenic cargo
containment systems. Membrane tanks dominate the world cargo capacity for LNG
transport as they allow the construction of large capacity carriers of Q-flex
(210,000 cu. m.) and Q-max (260,000 cu. m.) vessels.

The LNG
has to be offloaded at the destination point and it is usually done in two
ways. LNG is converted into gaseous form onboard and then offloaded to the
storage at the destination. These kinds of vessels have re-gasification
facilities onboard. Alternatively, it can be delivered in liquid form to the
storage of the re-gasification plant at the destination.

Key challenges in LNG
transportation and distribution

As
discussed before, LNG has to be transported in liquid form so as to gain
economics in transportation. However, the vessels needed to transport LNG have
to be built with adequate insulations which entail huge costs. Hence, the daily
tanker tariff is also very high. During the peak market conditions, the
estimated daily rate of the LNG cargo vessel is in the range of about USD
90,000 per day depending on the size and type of the vessel.

However
adequately the vessel is insulated, there is always a boil-off of liquid during
the transportation process. The liquid gas evaporates and hence there is a loss
of product in transit. This is another challenge faced by the LNG operators.

At the
destination point, establishment of re-gasification facilities is an essential
pre-requisite to make LNG a consumable product. This again requires additional
investments in the infrastructure such as plant facilities, inbound pipelines,
storage, outbound pipeline for distribution, etc. Also, during the process,
there is handling loss of LNG which again adds to the financial strain. From
the distribution perspective, natural gas is consumed by industries and
domestic end users. Hence, multiple modes of supply and distribution network have
to be established to ensure sustenance of the market. For domestic use, piped
gas network for homes needs to be built for easy and safe consumption while
industrial customers require massive pipeline network for receiving and further
processing of the natural gas. In some cases, such as supplies to vehicle gas
stations, natural gas is distributed through trucks. This requires separate
loading facilities at the re-gasification plant.

LNG requires exhaustive infrastructure to extract, ship and distribute for safe and secure consumption. Also, LNG project is highly capital intensive fraught with high risks such as volatile market, geo-political situation, longer project cycle, lengthy payback period, etc. Despite these challenges, LNG stands out as a gift of the nature to the community in terms of cleaner and cheaper fuel.

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